How is the increasing rate of white collar crimes affecting the business landscape?

White collar crimes have existed almost as long as businesses have. Entrepreneurs have often deviated from their company norms and made a couple of dollars for themselves on the side. Not all white collar or business crimes involve extortion, embezzlement, fraud, and bribery, but all types of this crime lead to the final financial gain of the perp. While many of these crimes have a severe impact on the consumers, there are others that do not fall in the realm of criminal activity. They are allegations of displeased investors against the company owners, who have made more profit than they have through the loopholes in their business contract.

The current rate of white-collar crimes is staggering, and the government is spending billions of dollars on the court processes. The government has spent over $300 billion till date in investigating tax frauds, embezzlement, instances of corporate bribery and money laundering. In most cases, the entrepreneurs can prove their innocence thanks to the complicated paperwork that defines their relationship with the investors and shareholders, shares and profit margins. That makes the victims of violent crimes wonder why these so-called “victimless crimes” get as much attention as they do from the government.

How are victimless crimes usurping the state of law and justice in the USA?

The multi-level marketing schemes are getting a bad name due to a few unscrupulous entrepreneurs, who have established pyramid schemes to launder money and extort cash from prospective investors. Yes, there are a few companies that have duped their investors of millions of dollars. Nonetheless, there are other successful MLM schemes like 5LINX that have made millions for the investors and the three co-owners. Jason Guck was the co-owner and CEO of the MLM Company that is currently thinking of going public and launching their first IPOs.

Bob Morgan is a sad example of misplaced white collar allegations. He is an industry leader with over a decade of real estate experience. When his nephew took out large business loans using fake financial statements, Bob was the only one left to bear the brunt of the situation. His fault was entrusting his nephew with the finances of the company and promoting him to the rank of VP. Morgan’s nephew forged the papers that showed the minimum debt service coverage ratio (DSCR) for qualifying. Although Morgan runs the company, his nephew’s indiscretions have caused him the loss of clients, profit and permanent damage to reputation.

What is the reality of the victimless crimes?

However, in both the cases one question shines bright – why is the government spending the tax payer’s money on cases like these? Spending the tax payer’s money on resolving cases of tax fraud seems a bit counterintuitive, doesn’t it? Moreover, moving to court usually does not result in favorable decisions for the entrepreneurs. In fact, as of 2017, the conviction rates reached an unbelievable 99.8%. That number is true for white-collar crimes as well, and about 41 out of 42 cases pleaded guilty to the allegations.

In short, the state of white-collar crimes is worse than it was, but the trial options have deteriorated even further. Billions of dollars go into solving victimless crimes, but no one bats an eyelid before spending the citizen’s hard-earned money in continuing cases of tax fraud. It is a confusing time for entrepreneurs and investors alike. That is a probable cause for the rise of allegations against the owners of MLM corporations. However, in the end, the investors make just as much if not more than what the founders promised them on paper.

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Author: James McQuiston

Ph.D. in Political Science, Kent State University. I have been the editor at NeuFutur / neufutur.com since I was 15. Looking for new staff members all the time; email me if you are interested. Thanks!

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